How Does Public Transportation Influence Hotel Demand? Evidence From a Natural Experiment

Public transportation is an important factor that influences hotel selection by urban tourists, but the role of public transportation in hotel demand is still not well understood, particularly at the intracity level. The opening of Metro Line 2 in Xiamen, China, provides a natural experimental setting in which to answer this question. Utilizing hotel check-in data in Xiamen, we empirically investigated the impact of public transportation on hotel demand through a difference-in-differences model with propensity score matching. The results suggested that the opening of Metro Line 2 has positively impacted demand for nearby hotels on average, but this relationship is negatively moderated by the tourist attraction accessibility of hotels. Specifically, the influence of Metro Line 2 opening is weaker for hotels with higher tourist attraction accessibility. The findings provide important insights for operational management, hotel site selection and urban planning. • Identifying the impact of intracity public transportation on hotel demand. • Taking the opening of a new metro line in Xiamen, China, as study context. • Employing a difference-in-difference model to obtain a more precise estimation. • Opening of the new metro line positively impacted demand for nearby hotels. • Tourist attraction accessibility negatively moderates the impact on hotel demand.